Category: Management and Organizations

Good governance went out of the window when a reductive view of human nature took hold

Simon Caulkin [website, @nikluac]  in The Guardian:

The irony is that we know what makes companies prosper in the long term. They manage themselves as whole systems, look after their people, use targets and incentives with extreme caution, keep pay differentials narrow (we really are in this together) and treat profits as the score rather than the game. And it’s a given that in the long term companies can’t thrive unless they have society’s interests at heart along with their own.

So why do so many boards and managers, supported by politicians, systematically do the opposite – run companies as top-down dictatorships, pursue growth by merger, destroy teamwork with runaway incentives, attack employment rights and conditions, outsource customer service, treat their stakeholders as resources to be exploited, and refuse wider responsibilities to society?

The answer is that management in the 1980s was subject to an ideological hijack by Chicago economics that put at the heart of governance a reductive “economic man” view of human nature needing to be bribed or whipped to do their exclusive job of maximising shareholder returns. Embedded in the codes, these assumptions now have the status of unchallenged truths.

Inevitable strategy

Roger Martin illustrates the difference between Mintzberg‘s emergent strategy and deliberate strategy:

Every company has a strategy. Whether it ‘does strategy’ explicitly or not, the choices that it makes on a daily basis result in the company operating on some part of the playing field (i.e. making a where-to-play choice) and competing there in some fashion (i.e. making a how-to-win choice). It matters not a whit whether the industry is highly uncertain, every company competing in it has a strategy.

Without making an effort to ‘do strategy,’ though, a company runs the risk of its numerous daily choices having no coherence to them, of being contradictory across divisions and levels, and of amounting to very little of meaning. It doesn’t have to be so. But it continues to be so because these leaders don’t believe there is a better way.

Are ‘big data’ making strategists redundant?

Not yet, says Andrew Hill at FT.com:

Unlike intelligent fridges that can buy their own groceries online, large data-driven companies can’t order their own strategic direction. Even if they could, they would need someone sitting in front of a dashboard to decide, on the basis of abundant data, which innovation to bless with scarce capital. That, at least, will come as a relief to CEOs, as they struggle to keep their heads above water.

You believe that time is money… and it’s making you miserable

A recent paper from Jeffrey Pfeffer at Stanford and Sanford DeVoe of the University of Toronto argues that promoting an “economic view of time” (that time is scarce and should be thought of in monetary terms) makes us less able to enjoy time off because we always think of it as losing money:

The modern employment relationship generally increases the connection between time and money with important implications for people’s choices about how to use their time, including how much to work and how much to volunteer their time in unpaid activities. Although it may not have been consciously done, modern management seems to have created a hedonic treadmill in which people want to trade time for money and because of thinking of time like money cannot enjoy leisure activities as much.

…the social status of leisure versus work has changed over time so that working is now a status symbol, signaling people’s importance to their organizations—a change that itself may derive in part from how we view time.

via Business Insider.

Mind your metaphors: We’re a team, not a family

Our staff would say: “We’re a family. We’re a family.” And I’ve actually said directly to everyone in all-staff meetings: “We’re not a family, because in a family you never can fire somebody like your Uncle Joe. You just can’t. You have to put up with him because he’s family. In an organization, if someone is taking the organization down, we can’t accept that because the organization is bigger than any one of us.”

So I’ve said to them that the analogy that best suits us is, “We’re a team,” and in a team, everybody’s got a role to play. And the team wins when everybody plays their roles to their best ability. The other thing that’s different in a team is that people understand the concept of roles. So if you’re the manager, you have a job to do as a manager. No one, generally speaking, resents the fact that you have authority because they understand that it comes with the role of a manager and that teams need managers. They don’t manage themselves.

But in a family, it is about power. You know, Mom or Dad has the power, and I think the dynamic that often plays out in a workplace is that people project all of their parental stuff. And I remember a job where I actually had to say to my team: “I am not your mother. I’m the division director here. I have a job to do. You have a job to do.”

via NYTimes.com.

 

What gets in the way of innovation?

Tim Brown: The biggest barrier is needing to know the answer before you get started. This often manifests itself as a desire to have proof that your idea is worthwhile before you actually start the project: “show me the business proof that this is going to be a good idea.” You can understand this, of course, because it’s an attempt to mitigate risk. But wanting to know whether you’ve got the right idea—or the assumption that you’ve got to have a business case—before beginning to explore something kills a lot of innovation.

Now, if you want to do some incremental innovation in a market, with products you understand well, then there’s a reasonable argument that you should have a pretty good business case. But not if your ambition is “to create the next iPod.” Steve Jobs didn’t know what the business case was going to be for the iPod before he started.

The innovation process is a series of divergent and then convergent activities—a very simple concept, but one that a lot of leaders used to managing efficient processes in their businesses struggle with.

via The McKinsey Quarterly